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Economists Split on Singapore Central Bank Tightening: Survey

The Monetary Authority of Singapore (MAS). (File photo: AFP/ROSLAN RAHMAN)

By Michelle Jamrisko and Myungshin Cho

Economists are split on whether the Monetary Authority of Singapore will change its policy stance in April amid subdued inflation pressure.

Four of seven economists see the central bank shifting to a tightening stance next month, according to a Bloomberg survey conducted March 13-16. The MAS opened the door to a possible move in its October policy meeting, after easing three times between January 2015 and April of last year.

The MAS is the only central bank in a major developed nation to use the exchange rate as its main tool. All four economists who projected an April tightening in the latest survey see the central bank adjusting the slope, rather than the width or center, of the currency band, which it doesn’t disclose.

Low rates of unemployment and a pick-up in global demand are kindling inflation pressures in developed nations around the world, prompting more central banks to begin tightening monetary policy, including in Asia.

In Singapore, policy makers are faced with an “expansionary” budget that will underpin a recovering economy, albeit one with weak inflation. Consumer prices were unchanged in January from a year ago, and economists surveyed by Bloomberg predict price growth of just 0.4 percent in February, ahead of the government release on Friday.

To contact the reporters on this story: Michelle Jamrisko in Singapore at mjamrisko@bloomberg.net; Myungshin Cho in Seoul at mcho38@bloomberg.net. To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net Chris Bourke

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